Survey finds optimism and resilience among UK manufacturers

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Over a third of UK manufacturers plan to buy British to overcome future supply chain shortages, a major survey has found.  

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The 2022 Make UK/PwC Senior Executive survey has found that companies are building resilience into business models, which is highlighted by 35 per cent of companies planning to source from Britain and 31 per cent planning to re-locate some, or more, of their production back to the UK.

Escalating inflationary pressures and access to talent and key skills have been identified as the biggest issues companies are addressing. Despite this, 73 per cent of companies believe conditions for the manufacturing sector will improve in 2022.

In a statement, Make UK chief executive, Stephen Phipson, said: “It’s testament to the strength of manufacturers that they have emerged from the turbulence of the last couple of years in such a relatively strong position. While clouds remain on the horizon in the form of rapidly escalating costs and access to key skills, the outlook is more positive for those that remain adaptable, agile and innovative.” 

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According to the survey, almost two thirds (63 per cent) of companies believe the UK is a competitive location for manufacturing with just 13 per cent believing it to be an uncompetitive place to do business. 

However, one year on from leaving the EU, two thirds of companies said that leaving had moderately or significantly hampered their business, with 56 per cent of companies fearing a further impact this year from customs delays due to import checks and changes in product labelling.

The more overall positive outlook for growth is reflected across all major markets with 40 per cent of companies forecasting growth in exports to the United States, followed by the EU. Around a quarter (26 per cent) are looking for growth in Asia and 21 per cent to the Middle East. The EU market is set to see the biggest decrease in exports by ten per cent of companies.

“To build on this we now need to see a government fully committed to supporting the sector at home and overseas,” said Phipson. “This requires more than a Plan for Growth but a broader industrial strategy that sets out a long term vision for the economy and how we are going to achieve consistent economic growth across the whole country.”

Up-skilling or retaining existing staff was the biggest priority for around two thirds of companies (67 per cent) followed by new product development (60 per cent) and capital equipment (54 per cent), while 78 per cent envisage a significant or moderate increase in their productivity this year.

Skills and talent also dominated the risk factors companies were facing with access to labour seen as the biggest risk by 58 per cent of companies, while almost nine in ten companies were not just worried about losing skills from their business but the sector entirely. Despite the current financial challenges 45 per cent of companies said they still planned to invest in apprenticeships in 2022.

The survey also shows the increasing drive towards ‘net zero’ for manufacturers. Half of companies (49 per cent) said they plan to invest in green technologies or energy efficiency measures in 2022, with a third saying this investment has increased. A third also said the process to transition to ‘net zero’ had been accelerated by the recent COP 26 Conference.

The survey of 228 companies was conducted between 27th October and 22nd November 2021.